Sunday, September 15, 2019

Public Bank reports lower net profit in Q2 2019

For the first half of 2019, Public Bank recorded a lower net profit of RM2.74 billion against RM2.80 billion year-on-year. ― Reuters pic

KUALA LUMPUR, Aug 14 ― Public Bank Bhd’s net profit eased to RM1.33 billion in the second quarter ended June 30, 2019, against RM1.40 billion posted a year earlier, due to negative effects from the 0.25 per cent overnight policy rate (OPR) reduction in May 2019.

Revenue for the quarter, however, rose to RM5.60 billion from RM5.44 billion year-on-year.

For the first half of 2019, Public Bank recorded a lower net profit of RM2.74 billion against RM2.80 billion year-on-year, while revenue increased to RM11.17 billion from RM10.79 billion previously.

“The economic and banking environment was increasingly challenging. In addition to this, arising from the reduction of OPR in May 2019, domestic banks were faced with a decline in net interest margins, which affected the profit for the half-year ended June 30, 2019,” said chairman emeritus Tan Sri Dr Teh Hong Piow in a statement today.

However, he said Public Bank was able to sustain stable profitability underpinned by its healthy loans and deposits growth, stable asset quality and prudent cost management.

Public Bank continued to sustain a stable gross impaired loans ratio of 0.5 per cent and efficient cost-to-income ratio of 34.2 per cent, leading to a continued resilient net return on equity of 13.6 per cent for the first half of 2019

In the first half of 2019, the Public Bank group’s total loans grew favourably by an annualised rate of 4.0 per cent to RM323.7 billion.

Domestic loans, which covered more than 90 per cent of the group’s loan portfolio, grew by an annualised rate of 4.3 per cent, which was higher than the banking system’s annualised loan growth of 2.7 per cent.

On the funding side, the Public Bank Group achieved a healthy deposit growth, registering an annualised growth rate of 5.9 per cent to RM349.1 billion with domestic deposits grew 5.7 per cent in the first half of 2019.

As at end of June 2019, the group’s funding position remained stable with a healthy gross loan to fund and equity ratio of 78.9 per cent and continued to achieve a low gross impaired loan ratio of 0.5 per cent.

For the first six months of 2019, Public Bank’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio were at 13.2 per cent, 13.6 per cent and 16.0 per cent, respectively. ― Bernama

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